13122 Federal Register / Vol. 89, No. 35 / Wednesday, February 21, 2024 / Notices 

21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSEARCA–2024–13 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–NYSEARCA–2024–13. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. Do not include 

personal identifiable information in 

submissions; you should submit only 

information that you wish to make 

available publicly. We may redact in 

part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to file number SR–NYSEARCA–2024– 

13, and should be submitted on or 

before March 13, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–03453 Filed 2–20–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99537; File No. SR–Phlx– 

2024–04] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Equity 7, 

Section 3(a) 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

1, 2024, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

pricing schedule at Equity 7, Section 

3(a), as described further below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to provide an additional 

calculation for purposes of determining 

whether a member qualifies for credits 

set forth in Equity 7, Section 3(a) that 

pertain to providing liquidity. 

Presently, the Exchange provides its 

members with various credits for 

executing orders that add liquidity to 

the Exchange and charges them various 

fees for executing orders, that remove 

liquidity from the Exchange, as set forth 

in Equity 7, Section 3(a) of the 

Exchange’s Rules. The charges and 

credits in Equity 7, Section 3(a) apply to 

the use of the order execution and 

routing services of the Nasdaq PSX 

System by members for all securities 

priced at $1 or more that it trades. 

Members may qualify for tiers of 

discounted fees and premium credits 

based, in part, upon their volume on the 

Exchange as a percentage of total 

‘‘Consolidated Volume.’’ 

Pursuant to Equity 7, Section 3(a), the 

term ‘‘Consolidated Volume’’ means the 

total consolidated volume reported to 

all consolidated transaction reporting 

plans by all exchanges and trade 

reporting facilities during a month in 

equity securities, excluding executed 

orders with a size of less than one round 

lot. For purposes of calculating 

Consolidated Volume and the extent of 

a member’s trading activity, the 

following are excluded from both total 

Consolidated Volume and the member’s 

trading activity: (1) the date of the 

annual reconstitution of the Russell 

Investments Indexes; (2) the dates on 

which stock options, stock index 

options, and stock index futures expire 

(i.e., the third Friday of March, June, 

September, and December); (3) the dates 

of the rebalance of the MSCI Equities 

Indexes (i.e., on a quarterly basis); (4) 

the dates of the rebalance of the S&P 

400, S&P 500, and S&P 600 Indexes (i.e., 

on a quarterly basis); and (5) the date of 

the annual reconstitution of the Nasdaq100 and Nasdaq Biotechnology Indexes. 

Generally, the ratio of consolidated 

volumes in securities priced at or above 

$1 (‘‘dollar plus volume’’) relative to 

consolidated volumes inclusive of 

securities priced below a dollar is 

usually stable from month to month, 

such that ‘‘Consolidated Volume’’ has 

been a reasonable baseline for 

determining tiered incentives for 

members that execute dollar plus 

volume on the Exchange. However, 

there have been a few months where 


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Federal Register / Vol. 89, No. 35 / Wednesday, February 21, 2024 / Notices 13123 

3For example, the Exchange provides a credit of 

$0.0033 per share executed to members providing 

liquidity for orders entered by a member that 

provide 0.15% or more of total Consolidated 

Volume during the month. See Equity 7, Section 

3(a). Under the proposal, in addition to calculating 

the member’s volume and total Consolidated 

Volume exclusive of volume that consists of 

executions in securities priced less than $1, the 

distinct qualifying volume percentage threshold 

would be increased by 10%. Therefore, for purposes 

of this example, in order to qualify for the credit 

using volumes excluding sub-dollar activity, the 

member would need to provide 0.165% or more of 

total Consolidated Volume during the month (i.e., 

0.15% + (10%)(0.15%)). 

4 15 U.S.C. 78f(b). 

5 15 U.S.C. 78f(b)(4) and (5). 

6NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 

7Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

volumes in securities priced below a 

dollar (‘‘sub-dollar volume’’) have been 

elevated, thereby impacting the ratio 

mentioned above. 

Anomalous rises in sub-dollar volume 

stand to have a material adverse impact 

on members’ qualifications for pricing 

tiers/incentives because such 

qualifications depend members upon 

achieving threshold percentages of 

volumes as a percentage of Consolidated 

Volume, and an extraordinary rise in 

sub-dollar volume stands to elevate 

Consolidated Volume. As a result, 

members may find it more difficult, if 

not practically impossible, to qualify for 

or to continue to qualify for their 

existing incentives during months 

where there are such rises in sub-dollar 

volumes, even if their dollar plus 

volumes have not diminished relative to 

prior months. 

The Exchange believes that it would 

be unfair for its members that execute 

significant dollar plus volumes on the 

Exchange to fail to achieve or to lose 

their existing incentives for such 

volumes due to anomalous behavior that 

is extraneous to them. Therefore, the 

Exchange wishes to amend its Rules to 

help avoid extraordinary spikes in subdollar volumes from adversely affecting 

a member’s qualification of incentives 

for their dollar plus stock executions. 

Accordingly, the Exchange proposes 

to amend its pricing schedule at Equity 

7, Section 3(a) to state that, for purposes 

of calculating a member’s qualifications 

for credits that pertain to providing 

liquidity set forth in Section 3(a), the 

Exchange will calculate a member’s 

volume and total Consolidated Volume 

twice. First, the Exchange will calculate 

a member’s volume and total 

Consolidated Volume as presently set 

forth in Equity 7, Section 3(a) (i.e., 

inclusive of volume that consists of 

executions in securities priced less than 

$1). Second, the Exchange will calculate 

a member’s volume and total 

Consolidated Volume exclusive of 

volume that consists of executions in 

securities priced less than $1, while also 

increasing the distinct qualifying 

volume percentage thresholds, as set 

forth in Section 3(a), by 10%. 

Thereafter, the Exchange proposes to 

assess which of these two calculations 

would qualify the member for the most 

advantageous credits for the month and 

then it will apply those to the member. 

Although the Exchange wishes to 

avoid extraordinary spikes in sub-dollar 

volumes from adversely affecting a 

member’s qualification of incentives for 

their dollar plus stock executions, the 

Exchange proposes to include certain 

limits on the proposal to efficiently 

allocate the Exchange’s limited 

resources for incentives. Specifically, as 

noted above, the Exchange proposes to 

limit the application of the proposed 

calculation excluding sub-dollar 

volumes to those incentives in Section 

3(a) that pertain to providing liquidity. 

In addition, as noted above, the 

Exchange proposes to increase the 

distinct qualifying volume percentage 

thresholds set forth in Section 3(a) by 

10% for purposes of the proposed 

calculation excluding sub-dollar 

volumes.3 The Exchange wishes to 

impose such limitations in order to limit 

the cost impact on the Exchange, while 

still providing some relief to members 

in months with extraordinary spikes in 

sub-dollar volumes. The Exchange has 

limited resources to devote to incentive 

programs, and it is appropriate for the 

Exchange to reallocate these incentives 

periodically in a manner that best 

achieves the Exchange’s overall mix of 

objectives. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with section 6(b) 

of the Act,4 in general, and furthers the 

objectives of sections 6(b)(4) and 6(b)(5) 

of the Act,5 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its schedule of credits are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

equity securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . . .’’ 6

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 7

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for equity 

security transaction services. The 

Exchange is only one of several equity 

venues to which market participants 

may direct their order flow. Competing 

equity exchanges offer similar tiered 

pricing structures to that of the 

Exchange, including schedules of 

rebates and fees that apply based upon 

members achieving certain volume 

thresholds. 

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. 

The Exchange believes that the 

proposal is reasonable and equitable 

because, in its absence, members may 

experience material adverse impacts on 

their ability to qualify for certain 

incentives during a month with an 

anomalous rise in sub-dollar volumes. 

The Exchange does not wish to penalize 

members that execute significant 

volumes on the Exchange due to 

anomalous and extraneous trading 

activities of a small number of firms in 

sub-dollar securities. The proposed rule 

would seek to provide a means for 

members that provide liquidity to avoid 


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13124 Federal Register / Vol. 89, No. 35 / Wednesday, February 21, 2024 / Notices 

8As noted above, in considering whether a 

member meets qualifying credit criteria using the 

proposed calculation excluding sub-dollar volumes, 

the distinct qualifying volume percentage 

thresholds would be increased by 10%. 9 15 U.S.C. 78s(b)(3)(A)(ii). 

such a penalty by determining whether 

calculating member volume and total 

Consolidated Volume to include or 

exclude sub-dollar volume 8 would 

result in Exchange members qualifying 

for the most advantageous credits, and 

then applying the calculations that 

would result in the incentives for 

providing liquidity that are most 

advantageous to each member. The 

Exchange believes it is reasonable to 

limit the proposal by applying the 

proposed calculation to incentives that 

pertain to providing liquidity and 

increasing the distinct qualifying 

volume percentage thresholds by 10% 

when using the proposed calculation 

excluding sub-dollar volumes because 

the Exchange has limited resources to 

devote to incentive programs, and it is 

appropriate for the Exchange to 

reallocate these incentives periodically 

in a manner that best achieves the 

Exchange’s overall mix of objectives. 

The Exchange believes that the 

proposed rule change is an equitable 

allocation and is not unfairly 

discriminatory because the Exchange 

does not intend for the proposal to 

advantage any particular member and 

the Exchange will apply the proposed 

calculation to all similarly situated 

members. 

Those participants that are 

dissatisfied with the changes to the 

Exchange’s schedule of credits are free 

to shift their order flow to competing 

venues that provide more favorable fees 

or generous incentives. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intramarket Competition 

The Exchange does not believe that its 

proposal will place any category of 

Exchange participant at a competitive 

disadvantage. 

The Exchange intends for its proposal 

to help avoid pricing disadvantages due 

to anomalous spikes in sub-dollar 

volumes and is not intended to provide 

a competitive advantage to any 

particular member. The Exchange also 

intends for its proposal to reallocate its 

limited resources more efficiently and to 

align them with the Exchange’s overall 

mix of objectives. The Exchange notes 

that its members are free to trade on 

other venues to the extent they believe 

that the proposal is not attractive. As 

one can observe by looking at any 

market share chart, price competition 

between exchanges is fierce, with 

liquidity and market share moving 

freely between exchanges in reaction to 

fee and credit changes. 

Intermarket Competition 

In terms of inter-market competition, 

the Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

credits and fees to remain competitive 

with other exchanges and with 

alternative trading systems that have 

been exempted from compliance with 

the statutory standards applicable to 

exchanges. Because competitors are free 

to modify their own credits and fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which credit 

or fee changes in this market may 

impose any burden on competition is 

extremely limited. The proposal is 

reflective of this competition. 

Even the largest U.S. equities 

exchange by volume has less than 20% 

market share, which in most markets 

could hardly be categorized as having 

enough market power to burden 

competition. Moreover, as noted above, 

price competition between exchanges is 

fierce, with liquidity and market share 

moving freely between exchanges in 

reaction to fee and credit changes. This 

is in addition to free flow of order flow 

to and among off-exchange venues, 

which comprises upwards of 40% of 

industry volume. 

In sum, if the changes proposed 

herein are unattractive to market 

participants, it is likely that the 

Exchange will lose market share as a 

result. Accordingly, the Exchange does 

not believe that the proposed changes 

will impair the ability of members or 

competing order execution venues to 

maintain their competitive standing in 

the financial markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to section 

19(b)(3)(A)(ii) of the Act.9

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

Phlx–2024–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–Phlx–2024–04. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 89, No. 35 / Wednesday, February 21, 2024 / Notices 13125 

10 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. Do not include 

personal identifiable information in 

submissions; you should submit only 

information that you wish to make 

available publicly. We may redact in 

part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to file number SR–Phlx–2024–04, and 

should be submitted on or before March 

13, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Dated: February 14, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–03450 Filed 2–20–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99535; File No. SR– 

NASDAQ–2024–005] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Equity 7, Section 118 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

1, 2024, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s pricing schedule at Equity 7, 

Section 118, as described further below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to (i) provide an additional 

calculation for purposes of determining 

whether a member qualifies for credits 

set forth in Equity 7, Section 118(a) that 

pertain to providing liquidity; and (ii) 

amend certain fees assessed for 

transactions in the Nasdaq Closing Cross 

and Nasdaq Opening Cross under Equity 

7, Section 118(d)(1) and Equity 7, 

Section 118(e)(1) respectively. 

Proposed Changes to Equity 7, Section 

118(a) 

Presently, the Exchange provides its 

members with various credits for 

executing orders that add liquidity to 

the Exchange and charges them various 

fees for executing orders that remove 

liquidity from the Exchange, as set forth 

in Equity 7, Section 118(a) of the 

Exchange’s Rules. The charges and 

credits in Equity 7, Section 118(a) apply 

to the use of the order execution and 

routing services of the Nasdaq Market 

Center by members for all securities 

priced at $1 or more that it trades. 

Members may qualify for tiers of 

discounted fees and premium credits 

based, in part, upon the volume of their 

activities on the Exchange as a 

percentage of total ‘‘Consolidated 

Volume.’’ 

Pursuant to Equity 7, Section 118(a), 

the term ‘‘Consolidated Volume’’ means 

the total consolidated volume reported 

to all consolidated transaction reporting 

plans by all exchanges and trade 

reporting facilities during a month in 

equity securities, excluding executed 

orders with a size of less than one round 

lot. For purposes of calculating 

Consolidated Volume and the extent of 

a member’s trading activity, the 

following are excluded from both total 

Consolidated Volume and the member’s 

trading activity: (1) the date of the 

annual reconstitution of the Russell 

Investments Indexes; (2) the dates on 

which stock options, stock index 

options, and stock index futures expire 

(i.e., the third Friday of March, June, 

September, and December); (3) the dates 

of the rebalance of the MSCI Equities 

Indexes (i.e., on a quarterly basis); (4) 

the dates of the rebalance of the S&P 

400, S&P 500, and S&P 600 Indexes (i.e., 

on a quarterly basis); and (5) the date of 

the annual reconstitution of the 

Nasdaq–100 and Nasdaq Biotechnology 

Indexes. For the purposes of calculating 

the extent of a member’s trading activity 

during the month on Nasdaq and 

determining the charges and credits 

applicable to such member’s activity, all 

M–ELO Orders that a member executes 

on Nasdaq during the month count as 

liquidity-adding activity on Nasdaq. In 

addition, volume from ETC Eligible LOC 

Orders and ETC Orders is not utilized 

to determine eligibility for any pricing 

tiers set forth in Section 118(a) to the 

extent that such eligibility is based upon 

MOC or LOC volume. 

Generally, the ratio of consolidated 

volumes in securities priced at or above 

$1 (‘‘dollar plus volume’’) relative to 

consolidated volumes inclusive of 

securities priced below a dollar is 

usually stable from month to month, 

such that ‘‘Consolidated Volume’’ has 

been a reasonable baseline for 

determining tiered incentives for 

members that execute dollar plus 

volume on the Exchange. However, 

there have been a few months where 

volumes in securities priced below a 

dollar (‘‘sub-dollar volume’’) have been 

elevated, thereby impacting the ratio 

mentioned above. 

Anomalous rises in sub-dollar volume 

stand to have a material adverse impact 

on members’ qualifications for pricing 

tiers/incentives because such 

qualifications depend members upon 

achieving threshold percentages of 

volumes as a percentage of Consolidated 

Volume, and an extraordinary rise in 

sub-dollar volume stands to elevate 

Consolidated Volume. As a result, 

members may find it more difficult, if 

not practically impossible, to qualify for 

or to continue to qualify for their 

existing incentives during months 

where there are such rises in sub-dollar 

volumes, even if their dollar plus 

volumes have not diminished relative to 

prior months. 

The Exchange believes that it would 

be unfair for its members that execute 

significant dollar plus volumes on the 

Exchange to fail to achieve or to lose 

their existing incentives for such 

volumes due to anomalous behavior that 

is extraneous to them. Therefore, the 


khammond on DSKJM1Z7X2PROD with NOTICES